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Governor’s FY ‘07 Budget Proposal Contains No Harmful Medicaid Cuts

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Governor’s FY ‘07 Budget Proposal Contains No Harmful Medicaid Cuts ...
Issue 30, Winter 2006

Governor’s FY ‘07 Budget Proposal Contains No Harmful Medicaid Cuts
and Increases for Approximately Half the State’s Home Help Workers


by Alison Hirschel, MPLP Elder Law Attorney

On February 9, Governor Granholm released her budget proposal for FY ‘07. Although there are numerous small adjustments to the Department of Community Health’s $11 billion budget, the proposal contains no harmful cuts for Medicaid beneficiaries. Moreover, the Governor proposes to increase payments to Home Help workers by $20 million. Currently, pay for these workers varies from $5.15/hour in some counties to approximately $10/hour in others. The Governor proposed raising the minimum pay for these workers in about half of the state's counties from $5.15 to $6.60 an hour although it is possible the new funding, if it is appropriated, may be distributed differently. Under the Governor’s proposal, approximately a third of the $20 million would support increases for workers in Wayne County where there is a high concentration of home help recipients. In parts of the state where the reimbursement level set by the county hovers around minimum wage, many home help recipients report difficulty finding workers who are able to assist them. The Administration believes the pay increase in those areas will increase Home Help recipients’ access to supports and services.

The Governor also anticipates $9 million in savings from increasing staff and seeking to reduce Medicaid eligibility errors. It appears these savings are anticipated to result from more careful scrutiny of transfers of assets that would make some applicants for Medicaid funded long term care ineligible for services for a period of time. At the same time the state is attempting to tighten its oversight of transfers of assets, the federal government in the recently enacted Deficit Reduction Act of 2005 has focused on ways to restrict eligibility and close perceived loopholes for applicants for Medicaid funded long term care (see related article on the Deficit Reduction Act by Doug Chalgian). The state is still reviewing the provisions of the DRA to determine how to implement them, but applicants will undoubtedly face more burdens in applying for Medicaid funded long term care and a greater likelihood that penalty periods will be imposed during which applicants will be ineligible for Medicaid payment for nursing home, PACE, or MiChoice services.

Other Medicaid developments not affecting seniors include a plan to provide Medicaid funded dental services to 40,000 additional children. The Administration also announced a goal of subsequently enrolling 30,000 additional children in the program. Moreover, because of the recently approved Section 1115 Family Planning waiver, the state will soon have additional funding to pay for family planning services and FDA-approved contraception for low-income women and families.


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